Beasley Allen files predatory lending lawsuit on behalf of City of Birmingham

Beasley Allen, along with Dagney Johnson-Walker, a Birmingham lawyer filed suit in November on behalf of the City of Birmingham against various sub-prime lenders including Wells Fargo, Regions Bank and Countrywide. The suit contends that the companies have violated the Fair Housing Act (FHA) by participating in predatory lending practices. The lawsuit also alleges the lenders violated other state laws and have profited by their wrongdoing.

The Birmingham City Council unanimously passed a resolution earlier this year to bring suit against the subprime mortgage lenders. The complaint alleges that as a result of the predatory lending practices of these lenders against many Birmingham residents, the City of Birmingham has lost tax revenue due to the high rate of foreclosures in the city. The excessive foreclosures have also caused the city to spend additional taxpayer funds maintaining abandoned properties, demolishing abandoned buildings, on increased abatement costs and on increased police and fire protection expenses due to increased crime rates in areas hardest hit by sub-prime foreclosures. The lawsuit has been filed in the Circuit Court of Jefferson County, Alabama and seeks compensatory, statutory, and punitive damages, as well as injunctive relief against the lenders to stop their predatory lending practices.

In December, mortgage lenders Wells Fargo, Countrywide Bank and Argent Mortgage Co. removed the case from Jefferson County Circuit Court to U.S. District Court, saying federal court was the proper venue because the case involves the Fair Housing Act. However, U.S. District Judge Inge Johnson disagreed and returned the lawsuit to state court.

Jere L. Beasley, who along with Jay Aughtman will try the case, observed, “The City of Birmingham and its citizens have been hurt because of the wrongful conduct of these predatory lenders. Our goal is to make the defendants pay for their wrongdoing. Their conduct is not only unlawful, it’s immoral.”

“Predatory lending is a problem in any community, especially when the ‘least of these’ have been targeted as in Birmingham,” said Councilor Roderick V. Royal, who represents District 9.

Some proceeds from the suit will be set aside in a fund to distribute to victims of predatory mortgage lenders.

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